Liam Fox MP proposes capital gains tax holiday

The senior Conservative MP Liam Fox is to bring Tory austerity divisions to the fore with a direct call for the chancellor to drop protected spending for schools, aid and the NHS.

In a speech on the economy to the Institute of Economic Affairs on Monday, the former defence secretary will also urge a wholesale rethink of earnings and savings taxation, including a capital gains tax holiday, to breathe life into the ailing economy, according to the Times.

His intervention, which comes the week before George Osborne's budget, echoes concerns raised by many of the party's backbenchers over the way funding has been ringfenced for three Whitehall departments, while others, like the Ministry of Defence, have been hit hard.